Hanmi Bank rises from Koreatown lender to regional bank

It began in 1982 as a small community bank for Korean immigrants in Los Angeles, California. Today, Hanmi Bank, under Nasdaq-listed Hanmi Financial Corp., has grown into one of the US' top 10 Asian American-owned banks, symbolizing the rising influence of the Korean community in the world's largest economy.

The first bank established by Korean immigrants to the US on Nov. 18 announced the launch of its first overseas office, in Seoul.

The office is expected to bridge the information gap for its customers with its home country, whose gross domestic product has soared more than 20-fold over the past four decades to $1,712.8 billion in 2023, according to the World Bank.

Its Seoul office will further help Korean companies to expand their operations and investments in the US. It is located within theInternational Finance Center Seoul (IFC). 

"Foreign direct investment from South Korea into the US has steadily
increased in recent years, and we anticipate this trend to continue," said Bonnie Lee, president and chief executive officer of Hanmi, in a press release.

The Seoul Financial Hub (SFH), a startup incubator run by the Seoul city government, supported its launch in South Korea.

Hanmi Bank operates 32 branches and eight loan offices across nine US states and had $7.7 billion in assets as of the end of September. It specializes in real estate lending and trade finance for small and middle-market business owners.

In the US, Asian immigrant-owned banks represent the single largest group of minority depository institutions by race, according to Investopedia.

Asian Americans are the country's fastest growing racial group and there were 71 Asian American-owned banks in the US as of the end of 2023, according to Investopedia.

Bank of Hope, founded in 1980, is the largest regional bank founded by Asian Americans in the US. It has already set up a Seoul representative office.

Its assets stood at $19.1 billion as of end-2023, more than double of Hanmi’s $7.6 billion. 

OUTPERFORMING A LARGER RIVAL

Despite its smaller assets and earnings, Hanmi Financial outperformed Hope Bancorp in terms of both net interest margin (NIM) and share price in the third quarter.

Hope Bancorp’s NIM dropped seven basis points to 2.55% in the third quarter compared with the previous quarter, while Hanmi Financial’s NIM gained five basis points to 2.74% over the same period.

Hanmi Financial’s share price has advanced 28% year-to-date as of Nov. 11 in line with the Nasdaq's 28% gain over the same period. By comparison, Hope Bancorp's share price grew 12% since the start of the year.

Institutional investors account for about 70% of Hanmi Financial's shareholders, according to Mansun Matthew Cho, head of its Seoul representative office.

SOLID EARNINGS

Hanmi Financial’s net income edged up to $14.9 million in the third quarter, compared with $14.5 million in the prior three months.

“These results reflect the continued success of our relationship banking model and our portfolio diversification strategy,” said Hanmi Bank's CEO Lee, in a third-quarter earnings report in October.

Meanwhile, Hope Bancorp’s net income fell 20% on-year to $24.2 million in the third quarter.

(This is an advertorial sponsored by the Seoul Metropolitan Government and Seoul Financial Hub)

Write to Yeonhee Kim at yhkim@hankyung.com
 

Edited by Jennifer Nicholson-Breen